An arrogant private sector threatens its relationship with Whitehall

Andrew Hooke

The Guardian

20 March 2014

The role of the private sector in providing public services is rightly being reviewed and questioned. Let's be honest: while there are many examples of good contracts, there are as many that are bad or less than satisfactory.

Of course, the answer is not an easy one; many very intelligent people have been applying their bright minds to this for years. Yet we are at a point where things do need to change if we are to see a positive difference in both the relationship between client and supplier and – as a consequence – the service and benefit to the citizen. It certainly is timely to be having the debate now. Margaret Hodge, chair of the Commons public accounts committee, last week said that Whitehall must urgently get its house in order, citing recent contracts that have gone awry.

The government does need to get its house in order, and one thing that Hodge called for was more transparency. This would be no bad thing – particularly if it goes both ways – but transparency will not work if the levels of trust diminish further, which seems to be the dangerous direction we are heading. The suggested measures – of extending freedom of information laws to all government contracts, of giving greater access to the National Audit Office and using open book contracts – are worthy of full discussion. But government will need to watch very carefully the significant, unintended consequence of measures that are over-bureaucratic, too concentrated on the input, naïve and impossible to implement in the business world.

By excessively micro-managing inputs, the government would curtail the flexibility that suppliers need to deliver good services, reducing innovation and idea generation and ultimately having an impact on the quality of the supply base itself. So transparency in the extreme will be unhelpful.

That said, the private sector must respond positively to these challenges. The only problem is that the measures being discussed seem to miss the big point. Yes we need a contract, yes we need clarity in relation to the performance measures and so on, but it is the disintegration of trust at the industry level and with individual companies that is at the heart of the problem.

Many of the companies supplying the UK government do deliver real innovation, making big improvements in outcomes and efficiency that both the government and citizens want. But private sector companies cannot solve everything, even if their corporate literature and business development departments say they can.

Companies need to be confident in their ability to deliver but, too often, this comes across as corporate arrogance – an ingredient that is never sweet in any relationship. Corporate arrogance is a line that, once crossed, is extremely difficult to return from and can colour how parts of the public sector view the private sector.

Arrogance can manifest itself in many ways – suppliers turning up with a ready-made solution they say will deliver, basing conclusions on assertion rather than facts, believing they know the customer better than the customer does, being over simplistic in how to deliver change or putting their interest ahead of the client's. Whether the arrogance is real or perceived does not matter – this is how suppliers are seen by many.

We in the private sector must also now pick up and respond in a real rather than cosmetic way and do real work to get our house in order, too. But I would suggest business leaders ask one question first – is my company corporately confident or corporately arrogant? If you are the latter, you are helping neither your colleagues nor your government clients.

Andrew Hooke is head of the government practice and chief operating officer at PA Consulting Group

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